Clinical trial technology company Medidata boasted consistent gains in revenue and income for the second quarter of 2018 during yesterday’s earnings call to investors.
Referencing these numbers, last month’s acquisition of Shyft Analytics, recent high-profile contracts, and increased recognition from industry analysts, Medidata CEO and Chairman Tarek Sherif said that his company is performing well and on-track to meet its year-end goals.
“Our results are being driven by our innovation and the trust our customers are putting in us to power their digital transformation with our unique platform and expertise,” Sherif said during the call. “We continue to sign significant multiyear deals, setting us up for long-term success. Our strategic position in the industry has never been stronger, while our record backlog gives us good visibility into the future years.”
In Q2 2018, Medidata’s total revenue was $155.9 million, a 15 percent increase from $136 million in Q2. This total was comprised of $130.5 million in subscription revenue (up 16 percent) and $25.4 million in professional services revenue (up 10 percent).
The company’s GAAP operating income for the quarter slightly increased to $12.8 million (up 1 percent), while non-GAAP operating income was $36.6 million (up 18 percent). GAAP net income rose to $16.6 million (up 120 percent), as non-GAAP net income was bumped up to $26.4 million (up 46 percent). Of note, the rise in GAAP net income was bolstered by a gain of $7.6 million from the company’s original investment in Shyft, while its cash balance primarily dropped from $663.3 million in December 2017 to $477.4 million as a result of the analytics company’s $195 million price tag.
“I’m pleased with our execution in the first half of the year, and we have a large opportunity ahead of us that we are excited to capitalize on,” Rouven Bergmann, Medidata’s chief financial officer, said during the call.
Speaking to the Shyft acquisition, Sherif noted that the company’s customers, employers, and shareholders have all responded well to the move. In addition, combining Shyft’s analytic capabilities with Medidata’s real-world drug investigation technology has already led to new business for the company. As an example, Sherif cited a recent contract with Novartis involving Shyft’s Strata and Lumen platforms.
Sherif also took the time to highlight data from industry analysts supporting Medidata’s role in the drug development industry. Specifically, he pointed to an overlap between the company’s offerings and the top priorities of chief information officers in life sciences as reported by Gartner’s research, and the company’s top position in IDC’s recent ranking of life sciences development software.
“Digital transformation is one of the hottest topics in life sciences today, creating both opportunities and challenges for our customers," Sherif said. "We are the right partner to help drive it, given our unified platform, and advanced data and analytics offerings.”
Medidata’s most recent earnings build on a strong 2017, which boasted a full-year revenue of $545.5 million and a full-year GAAP net income of $44.4 million. Speaking in February on the company’s 2017 reports, President Glen Michael de Vries stressed Medidata’s confidence in virtual clinical trial technologies.
“I want to emphasize the degree to which we are in the business of virtual trials,” Glen Michael de Vries, president and cofounder of Medidata, said at the time. “To put it simply, our experience with trials run outside of the clinic is as unrivaled as our experience in traditional in-clinic research. It was our team who ran the first fully virtual trial under an IND with Pfizer in 2011. It included the first remote consenting in the industry, and it included the first time drugs were ever shipped to patients at home. And since then, we've done more virtual trials than any other clinical tech vendor.”
